Drive Business with Telematics

Last fall, one of William Roberts’ customers was driving his BMW when an oil pressure warning came on. Before the customer had a chance to call Robert’s shop, WAR Automotive Technology in Revere, Mass., Roberts received a notification alerting him of the problem. Roberts looked up the fault code remotely thanks to data transmitted from the vehicle’s OBD-II port, identified the sensor malfunction, called the customer and told them to stop driving and have the car towed into the shop.

“They were one of the people who were like, ‘All these lights are idiot lights,’” he says. “It was better safe than sorry.”

Not only did Roberts help the customer avoid catastrophic damage, but he also was able to help the customer in real time and offer an explanation almost immediately. That’s the power of telematics, says Roberts, and it’s why he’s been an early adopter of aftermarket telematics devices.

“It essentially gives me a better connection to their vehicle,” he says.

Although telematics is still a fairly new concept, it’s growing rapidly and it’s not going anywhere: There were 9.5 million subscribers to onboard diagnostics solutions in 2014 and that number is expected to increase to 117.8 million by 2019, according to ABI Research’s Automotive Safety and Autonomous Driving Research Service. Plus, more than 9 million.

American drivers have ignored their car’s “check engine” light for three months or more, according to data from CarMD.com. Telematics gives you the ability to reach out to those customers the moment their check engine lights go on, ensuring that they not only won’t ignore the problem, but they also may come to your shop to fix the issue, says Parker Swift, CEO of Mechanic Advisor, which recently launched its own OBD-II telematics device.

“The idea of the device is to really connect the customer and mechanic beyond the visit,” he says. “The mechanic can have some insight into the customer’s car and, just as impor- tant, the driver has peace of mind that they’re not ignoring something they’re not aware of.”

That’s why getting on top of the telematics trend is something every shop can and should consider, says Jim Dykstra, owner of the three-location, $3.8 million Dykstra’s Auto in Grand Rapids, Mich. Aftermarket telematics devices are one way that repair shops won’t be locked out of receiving the information that telematics provides.

Dykstra—who has made telematics a profit center at his shop and created his own telematics device company— Swift, Roberts and Prag Shah, COO of Zubie, a connected car service that uses a telematics device and smart- phone app, describe the step-by-step process for using telematics to drive business in any shop.

1) UNDERSTAND TELEMATICS.

Although it’s a large topic, at its most basic level, telematics refers to the combination of computers and wireless telecommunications technology, often to deliver information over a given network. In terms of telematics in vehicles, that includes features such as hands-free phone calls, Internet-based radio, driver-assist features and real- time vehicle diagnostics.

When it comes to independent repair shops, the focus is often on vehicle diagnostics, which are relayed through after- market telematics devices. Those devices offer a connection between a service center and a vehicle owner regarding the health of the vehicle. Those devices—such as Zubie and Mechanic Advisor’s Connection Key—typically link to a vehicle through a dongle hookup in the OBD-II port. The system can detect any OBD-II codes and send information to drivers through a mobile app.

2) PARTNER WITH A TELEMATICS DEVICE COMPANY.

Now, find the right telematics device company to work for with your shop. There are a number of options but Shah recommends partnering with a company that will work with your volume and size and provide any support needed.

“The way the business model usually works for all the parties is based on the size and volume of vehicles that the service center is touching and we only want to target these types of vehicles, etc.,” says Shah. “They’re usually purchasing, based on different volume price points directly to the service center, the device up front at a one-time cost and there’s an ongoing service or a monthly service fee that we’re charging.”

Swift says that Mechanic Advisor typically sells 20–25 devices as the initial order and shops can then purchase more devices as needed. Roberts, who uses Mechanic Advisor’s Connect Key devices, says he wanted to use a device that was specifically created for mechanical repair shops and was able to link the customer directly to the shop.

3) CHOOSE YOUR PRICING MODEL.

One of the benefits of partnering with telematics device companies is that you can create the pricing structure that works best for your shop.

Dykstra has created a Connected Car Club in his shop, where he owns the hardware and pays the data subscriptions and customers pay a fee for joining the club, which also includes oil changes and other incentives. He also has a tiered pricing structure for fleet accounts that ranges from $10.99 per month to $15.99 per month, which includes more alerts and features.

“Aftermarket shops have used various packages for some time,” he says. “We saw a natural fit. Telematics by itself is a harder sale. You have to combine it with something else.”

Swift says that some shops choose to give the device to the customer free of charge because they see more benefit in it and the high-value customer they acquire. That’s the route Roberts has taken and he says that as the devices become more popular, it will save him time, build stronger relationships with customers and drive sales by being able to readily connect with their vehicles.

4) FIND THE RIGHT CUSTOMER.

A telematics device is not going to be right for every customer, says Swift. You need to figure out which subset of your customers is most likely to purchase such a tool, he says.

“Initially when we started this, we thought repair shops would want this for keeping a new customer,” he says. “We’ve found that they’re using this for the most loyal customers. They’re adding this as a benefit to the guy that comes all the time, but he’s come too late a couple times.”

In addition, Swift says that families, customers with children who are new drivers and those with older cars are also more likely to purchase the device.

“What we’ve found is that it’s best for used vehicles and vehicles that have some mileage, ones that are off warranty. If a new car has a problem and it’s under warranty, they’re going to take it back to the dealership where they bought it from. A customer who is off warranty or owns one of the hundreds of millions of used cars in the market, that’s where there’s a universal problem,” says Shah. “Whether you’re a 20-year-old with your first used car or a 45-year-old with a vehicle that came off warranty after three years, those problems still exist across all those different demographics.”

Dykstra says he has had consider- able success with small to mid-sized fleet accounts and Roberts adds that car enthusiasts and those with higher- end vehicles are also more likely to see the value in the device.

“They enjoy the vehicles they drive. They’re mostly Volkswagen and BMW owners. They’re really into their vehicles and like the connectivity,” he says. “They’re in an income demographic where they want to spend the money on their vehicle to keep it in original condition.”

5) SELL THE BENEFITS TO THE CUSTOMER.

Because telematics is still a relatively new concept, Dykstra says that you need to sell the benefits to the customer, but in a way that’s simple and easy to understand.“We the service provider, we want you to not worry about your car,” says Shah. “We want to take the worry out of driving or costly ownership. With this service, you the customer and we will know instantly when something is wrong. We’re going to stand behind you and we’re really here for you.”

Shah suggests highlighting every- thing the device can do, from maintenance and service intervals, to tracking wear and tear. Underscore that it’s real- time information of what’s going on with that vehicle and can even detect problems before they become larger and, subsequently, more costly.

“A perfect example is a low voltage or battery issue,” he says. “The battery is running low and even if the car isn’t on, we can alert whoever is chosen to be alerted that this car is about to have a dead battery before it dies. What that means mainly is that it’s worry free and seamless for the driver.”

6) ACT AS A RESOURCE FOR CUSTOMERS.

Swift says that to make this a valuable service, you need to take immediate action when a customer is having a problem. With most systems, an online dashboard will tell the shop, at a glance, how the customers’ vehicles with the device are doing. If a check engine light comes on the dashboard, for example, the device will send both the customer a notification and the shop an email notification.

“Instantly, you have actionable infomation,” Swift says. “Here’s what it is, the severity, here’s their VIN, mileage and DTC code.”

Swift says that regardless of what the issue is, you should reach out to the customer and act as a resource for them.

“We’re arming the service center with information that they don’t have. In order to basically help the service center deepen the linkage and the relationship they have with the customer,” he says. “The idea is not that they become a nuisance. The idea is, ‘This is Joe from Joe’s Automotive. I noticed your check engine light went on today. It’s not a big deal, it’s just a loose gas cap. Happy to take a look at it or if you tighten that, you should be all good.’ Or ‘It looks like your check engine light went on today and it’s really serious. If we don’t get this checked out in a week or two, it could be something really serious.’”

7) KEEP UP WITH CUSTOMERS IN REAL TIME.

Telematics devices also allow shops to keep up with customers in real-time and send more accurate service and maintenance reminders, thanks to the constant stream of data that’s being transferred from the vehicle.

“The service center, when they have a customer who recently came in, they have very little information of what’s going on with that customers. They know time has elapsed. They know where you were four months ago, this is the service they did, but they don’t know how much you’ve driven, if you’ve had issues, if you’ve taken her vehicle somewhere else,” says Shah. “How is wear and tear actually taking place on the vehicle.”

A telematics device solves that problem and allows you to see what’s going on with the customer in terms of how many miles they have driven, the number of miles from the last oil change, if they speed or brake frequently, etc. However, it’s ultimately the customer’s data and they tend to be weary of opting to have the device paired to the shop. That’s why it’s important to make sure you’re included in the notification, Roberts says, and stress the importance of the shop receiving them.

“I talk about the consistency,” he says. “They have the same person that they trust always giving them the information about their car that they want. It gives me a better connection to their vehicle and I explain the times savings, too. You don’t have to come in if it’s just a gas cap fault code.”

Next, Roberts will go through the pairing procedure to make sure the shop gets notification. Then, most devices allow you to send text messages or emails to customers straight from the dashboard alerting the customer of a service or maintenance reminder.

Anna Zeck is the managing editor at 10 Missions Media, where she writes content for Fixed Ops Business and oversees content creation for FenderBender and Ratchet+Wrench magazines.